Bidding opens on Kuwait’s Bubiyan Island port project

The bids cover construction of the first phase of a US $2 billion container port on Bubiyan Island.

Kuwait has invited bids for building the first phase of a container port on Bubiyan Island at a cost of around US $2 billion, according to the public works minister, Bader Al Humaidi. A private company will be set up to manage the port, where 30% of the company will be owned by a foreign operator and 30% by Kuwaiti investors. The remaining 40% will be sold in an initial public offering (IPO). “About 17 international and local companies have been prequalified for the project that is expected to start operations by the end of 2008 or early 2009,” he said in a report. The first phase includes dredging, and the building of a 34 km road linking the new port to Iraq’s Umm Qasr port, and the main infrastructure of the port at a cost of around $1 billion. It also involves building a railway parallel to the road and a bridge that links the island to the mainland at a cost of $400 million, according to the head of the ministry’s mega projects agency, Waleed Al Thaqeb. “Companies have three months to submit their offers and the ministry will make the selection within a month after that”, Thaqeb was quoted as saying. “All contracts are expected to be signed before the end of this year,” he said. The government has given the project the green light as part of a major plan to develop Bubiyan -- the largest of the emirate’s nine islands -- into a free zone, storage area, oil depot and recreational services. The capacity of the port after the conclusion of the first phase will be around 1 million twenty-foot equivalent units (TEUs). Capacity will rise to 2.5 million TEUs a year after the third and final stage in 2016. Bubiyan Island lies between Iraq, Iran and Kuwait at the northern tip of the Gulf. Experts expect demand for container trade in Kuwait and Iraq to reach three million TEUs in 2025. Currently there is no container trade in Iraq while Kuwait handles around half a million TEUs a year.